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Complete 2 page APA formatted essay: (business law)organization and financial structure of corporations.The issue to be determined is whether a director, who acts on behalf of a company before it is i
Complete 2 page APA formatted essay: (business law)organization and financial structure of corporations.
The issue to be determined is whether a director, who acts on behalf of a company before it is incorporated, but in good faith and on the knowledge that the organization is already incorporated, is liable for the actions.
Applicable rule of law to the case is the Revised Model Business Corporation Act that states that parties that assume actions as agents of a corporation with the knowledge that the subject organization has not been incorporated are liable for their actions (Mallor, Barnes, Bowers and Langvard, 2012).
The rule is suitable for determining the case because its provisions cover facts of the case. R & F Corporation had prepared its articles of association for filing and Rose was the chair of the corporation’s board and therefore acted on behalf of the organization, contracting for the lease of the warehouse. While the act protects parties to a contract with agents of a corporation who acts before the filing of the corporation’s documents, it protects individuals who act in good faith, especially with the knowledge that the organization is already legally incorporated. Determining the case therefore requires proof of whether or not, Rose acted in good faith, and whether or not, he was aware of the incorporation status of the organization.
The testimony by Rose that he acted believed the organization was already incorporated was supported by a co-director to R & F Corporation and this establishes validity of his limited knowledge. His position as the corporation’s chairman that identified responsibility of signing the board’s resolution further suggest that his actions were undertaken within his jurisdiction and for the interest of the corporation and the co-director’s testimony supports this. The facts of the case that indicates a long delay in filing the signed articles also justifies Rose’s testimony that he believed the documents had already been filed. The position that Rose held in the organization, board
